{"id":472516,"date":"2026-10-21T09:42:15","date_gmt":"2026-10-21T09:42:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-tx\/472516\/"},"modified":"2026-10-21T09:42:15","modified_gmt":"2026-10-21T09:42:15","slug":"practitioners-can-get-creative-in-texas-fraud-transfer-law-relief","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-tx\/472516\/","title":{"rendered":"Practitioners Can Get Creative in Texas Fraud Transfer Law Relief"},"content":{"rendered":"

The Texas Uniform Fraudulent Transfer Act authorizes a plaintiff to obtain<\/a> \u201can injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property.\u201d Those four little words \u2014 \u201cor of other property\u201d \u2014 are game-changing.<\/p>\n

Since TUFTA was enacted nearly four decades ago, those words have rarely been invoked to their full potential. Given the foundation provided by the statutory text and existing case law, practitioners shouldn\u2019t hesitate to seek expansive and creative forms of relief.<\/p>\n

TUFTA allows a plaintiff to prevent further transfers of fraudulently conveyed assets, but plaintiffs aren\u2019t limited to that relief. They can also seek to enjoin any \u201cother property\u201d that could be used to satisfy a judgment.<\/p>\n

This scope of relief spares the plaintiff the difficult task of trying to trace assets that were transferred multiple times or segregate funds that were commingled. It also avoids the general rule<\/a> that a court may not freeze assets unrelated to the subject matter of the lawsuit. Instead, all non-exempt assets are deemed fair game because any of them could be used to pay a judgment.<\/p>\n

This outcome is essential to effectuating TUFTA\u2019s purpose: preventing defendant debtors from prejudicing plaintiff creditors by moving assets out of reach or hiding funds out of sight. As one court<\/a> put it, a \u201cTUFTA plaintiff seeks to recover judgment for the value of the asset transferred, not the specific asset itself, which in many cases left the defendant\u2019s possession long ago.\u201d<\/p>\n

When a party improperly moves or hides assets, the remedy must include access to alternative sources of funds. Limiting a plaintiff\u2019s relief to chasing down the fraudulently dissipated assets would, in many cases, equate to no relief at all.<\/p>\n

Beyond preserving assets that can be used to satisfy a judgment, plaintiff\u2019s counsel can use TUFTA\u2019s \u201cother property\u201d provision to advance their cases in at least three other ways.<\/p>\n

First, counsel can invoke that language in an application for a temporary injunction to facilitate early discovery into the defendant\u2019s assets. Depending on the nature of the case, this could include court-ordered disclosures, negotiated exchanges of information, or live examinations at a hearing, to name just a few options.<\/p>\n

When a defendant claims to be judgment-proof \u2014 which is inevitably followed by a demand to settle at fire-sale prices \u2014 deciding whether to invest in litigation or pursue settlement involves considerable uncertainty and risk. Exploring what assets, if any, the plaintiff could ultimately recover at the temporary injunction stage, before the bulk of merits discovery and long before the judgment-enforcement stage, provides significant advantages.<\/p>\n

This discovery process may also involve less friction than typical litigation discovery. Because TUFTA defendants who refuse to provide information about their assets make it impossible for the court to issue a narrowly tailored injunction, and sometimes find themselves facing broad injunctive restraints<\/a> as a result, there is strong incentive to cooperate.<\/p>\n

TUFTA also includes a catch-all provision authorizing courts to grant \u201cany other relief the circumstances may require<\/a>.\u201d Applying this provision, courts in Texas (and other states with parallel laws) have ordered more involved measures such as a formal accounting of dissipated assets<\/a>. Whether used to reach a more favorable settlement or get a head start on litigating toward trial, practitioners should take advantage of this opportunity to gather information.<\/p>\n

Second, plaintiff\u2019s counsel can use the \u201cother property\u201d provision to generate settlement pressure by disrupting their adversary\u2019s ordinary dealings. In the context of personal assets, courts have rightfully taken care to avoid interfering with exempt assets or money used toward basic needs, but they have also limited spending to fund lavish lifestyles and restricted payments to other adults.<\/p>\n

As to business assets, courts have enjoined<\/a> tens of millions of dollars of funds without regard for a defendant company\u2019s need for working capital, forbidden<\/a> defendants from engaging in transactions that are central to their businesses, and even halted<\/a> pending sales, among other measures. The immediate and acute burden of injunctive relief often carries more weight than the distant, contingent threat of an unfavorable final judgment. When practitioners can carry the bigger stick, they should.<\/p>\n

Third, given the statutory authorization to enjoin \u201cthe debtor or a transferee,\u201d plaintiffs may be able to reach assets held by trusts<\/a> and affiliated entities<\/a> without the burden of piercing the veil. On this point, TUFTA creates a lower bar: A transferee is protected only if they \u201ctook in good faith and for a reasonably equivalent value<\/a>.\u201d<\/p>\n

Because the \u201cand\u201d requires both elements, someone who takes an asset without providing reasonably equivalent value can be subject to an injunction, regardless of culpability. Put differently<\/a>, TUFTA \u201coperates against the title of an \u2018innocent\u2019 transferee who has not paid value just a[s] fully as against the title of a transferee who has participated in a fraud.\u201d<\/p>\n

When a transferee is within the statute\u2019s ambit, the plaintiff may again seek an injunction \u201cof the asset transferred or of other property.\u201d This allows practitioners to achieve the advantages noted above while also reaching into a third party\u2019s pocket.<\/p>\n

Since the 1980s, 45 states have adopted their own versions of the Uniform Fraudulent Transfer Act, and almost all of them include the \u201cother property\u201d language. Yet litigants have invoked the law for purposes like these only rarely.<\/p>\n

Courts have discretion over the scope of injunctive relief and may focus on tracing the fraudulently transferred assets. But the case law isn\u2019t littered with rejected or narrowed requests for relief. Rather, it appears that parties generally haven\u2019t asked for more expansive relief. To tap into TUFTA\u2019s full potential, attorneys should think bigger.<\/p>\n

This article does not necessarily reflect the opinion of Bloomberg Industry Group Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.<\/p>\n

Interested in writing? Review our author guidelines<\/a> and submit pitches to Insights@bloombergindustry.com.<\/a><\/p>\n

Author Information<\/p>\n

Caitlin Halpern<\/a> is a partner at Gibbs & Bruns, litigating high-stakes disputes on both sides of the docket.<\/p>\n

Halpern<\/a> is a 2026 honoree of Bloomberg Law\u2019s \u201cThey\u2019ve Got Next: The 40 Under 40<\/a>.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"The Texas Uniform Fraudulent Transfer Act authorizes a plaintiff to obtain \u201can injunction against further disposition by the…\n","protected":false},"author":2,"featured_media":472517,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[70973,160124,18016,5324,27,29,28],"class_list":["post-472516","post","type-post","status-publish","format-standard","has-post-thumbnail","category-texas","tag-discovery","tag-fraudulent-conveyances","tag-injunctions","tag-settlements","tag-texas","tag-texas-headlines","tag-texas-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/472516","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=472516"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/472516\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/472517"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=472516"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=472516"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=472516"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}